New research by the Australian Securities and Investments Commission's (ASIC) Moneysmart program reveals that 47% of Australian adults, equating to approximately 5.8 million people, have struggled to make debt repayments in the past year. The top reasons cited for this struggle include cost of living pressures, reduced income, and unexpected expenses.

Despite these financial struggles, the research found that 30% of Australians would not seek a hardship assistance arrangement from their bank or lender. Instead, they would rather sell their belongings (42%) or get a second job (40%) before applying for financial hardship assistance.

"For many Australians, the path to seeking help feels daunting, confusing, and challenging. It is concerning that people would rather sell their personal belongings or get a second job rather than seek financial hardship assistance," said ASIC Commissioner Alan Kirkland.

The research also found that 55% of Australians are not aware that they are entitled to ask their bank or lender for financial hardship assistance. Only 20% of those surveyed have ever sought financial hardship assistance. The top barriers to seeking help include lack of awareness of assistance programs (37%), not knowing where to go for help (33%), and not knowing which sources to trust (31%). Emotional barriers also play a significant role, with 51% citing anxiety and stress caused by hardship, 40% feeling shame or embarrassment, and 40% feeling a sense of failure.

"Customers in hardship are entitled under the law to request assistance. These findings should be top of mind for lenders when supporting Australians in financial hardship," Kirkland added.

The research also revealed that 96% of those who experienced financial hardship also experienced negative side effects, including stress or anxiety (73%), loss of sleep (56%), or a decline in physical health or appearance (41%).

Of those who would not seek hardship assistance arrangements from their lenders or credit providers, 50% worry it will cost them more in the long run, 32% fear it will negatively impact their credit scores, and 31% don't think their lender would do much to help.

"Australians facing financial hardship should reach out to their bank or lender and 'Just Ask' for help. Seeking financial hardship assistance is a right, and lenders are required to respond to every request for hardship assistance," Kirkland urged.

In response to these findings, ASIC's Moneysmart is launching a new awareness campaign, 'Just Ask! Hardship Help is available', to encourage Australians to seek financial hardship assistance. ASIC's Moneysmart program provides free and independent financial information and tools, with over 10 million Australians visiting the Moneysmart website each year.

The research was conducted by ASIC via YouGov, surveying 1,061 Australians aged 18+ from 11 to 15 April 2024.